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assume a company makes only three products, d, e, and f: product d product e product f estimated customer demand in units 700 600 800 selling price per unit $ 80 $ 65 $ 45 variable cost per unit $ 35 $ 26 $ 20 machine-hours per unit 2.5 3.0 1.25 the company has only 2,700 machine-hours available. up to how much should the company be willing to pay per hour to lease additional machine capacity?

Respuesta :

The manufacture need to pay $35 per hour to lease additional machine capacity.

Margin means the difference between the cost at which a product is sold and the costs linked with making or selling the product (or price of goods sold). Broadly speaking, a manufacture's margin means its ratio of profit to employee.

Order of Production with own resources:

Product F's 800 units at 1.25 hours per unit = 1,000 hours

Product E's 600 units at 3.0 hours per unit = 1,800 hours

Sum of machine hours with own resources = 2,800 hours

Lease Machine Capacity:

Product D's 700 units at 2.5 hours per unit = 1,750 hours

Product E's 600 units at 3 hours per unit = 1,800 hours

Total machine hours required under leasing = 3,550 hours

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